Stocks rise to records on vague promise of tax cuts
All it took was a vague promise for a “phenomenal” tax plan.
U.S. stocks rose Thursday to records, the dollar jumped and Treasuries fell after President Donald Trump said long-awaited details on promised tax cuts would emerge within weeks, revitalizing trades that had begun to show signs of cracking.
The S&P 500 index surged to an all-time high, with airlines jumping after Trump promised industry executives he’d roll back regulations and announce a “phenomenal” tax plan.
Equities in Europe rallied after solid results from Societe Generale SA eased concerns about the region’s banks.
Treasuries fell, while French and Italian bonds gained amid ebbing political risk. Gold backed off its highest level since November.
Trump’s comments served as a lifeline to so-called reflation trades that were weakening as the administration expended energy defending immigration orders and threatening to rewrite trade terms while providing scant details on pro-growth policies promised during the campaign.
Equities surging to fresh highs on little more than the promise for details later this month demonstrated how starved investors have been for details on spending increases and tax cuts that should spark growth in the world’s largest economy.
What’s coming up in the markets
Attention will turn Friday to Shinzo Abe’s visit with President Donald Trump, as investors parse reports the Japanese prime minister is prepared to offer infrastructure investment, with the U.S. administration still sitting on details of its own policy proposal.
The International Energy Agency and OPEC monthly reports are due on Friday and Monday, respectively, providing the first full month of production data since the oil cartel’s supply deal.
A U.S. court of appeals is reviewing arguments on whether to reinstate the Trump administration’s temporary ban on immigration, with the outcome likely to be appealed to the Supreme Court.
Here are the main market moves
The S&P 500 rose 0.6 percent to a record 2,307.74 at 4 p.m. in New York. The index hadn’t moved more than 0.3 percent on a closing basis in the three days this week as it churned near the top of a range its held since mid-December.
Airlines jumped 2.5 percent amid Trump’s promise to cut regulations on the industry.
Banks led the rally with a 1.4 percent rise to halt a three-day slide.
The Dow Jones Industrial Average added 115.70 points to 20,170.04. Nike Inc. led gains with a 2.6 percent advance.
The Europe Stoxx 600 climbed for a third day, adding 0.8 percent, to the highest since Jan. 26.